Within your cut and paste, lies my point...
The CRA didn't FORCE banks to give out bad loans. You should read the CRA... and post the actual legislation that FORCES banks to give bad loans.
the repealing of Glass-Steagal, and allowing the commercial and investment banks to merge made giving bad loans PROFITABLE for large financial institutions as they were now able to bundle and sell these loans as financial products (derivatives). the Deregulation gave the banks the profit motive to give bad loans. It didnt matter if the loans were given to people who couldn't pay them, because the loan itself became profitable as a PRODUCT. And that Product was rated by agencies that the financial institutions were allowed to hire themselves (again because of deregulation)... so of course these products received triple A ratings, where sold by the hundreds of thousands... and thus began the collapse of our system.
Neither the CRA or the (name of the bill escapes me at the moment) bill that repealed Glass-Steagal) are the cause of the collapse separately... but COMBINED they are definitely a factor. the problem with the rhetoric today is that both sides are so driven towards placing blame on the other side that the miss the boat completely.
BOTH SIDES ****ED UP THIS ECONOMY OVER THE LAST 40 YEARS. That includes the prides of the left and right Clinton and Reagan.
our banking system and financial institutions, have found that it is more profitable to take excessive risk and make unrational decisions. The model for successful free market economics begins to fall apart when the profit motive is driven by practices that are NOT in the best interest of the system. The system is based on risk, sure... but if you offset, and offset, and offset that risk with complicated financial products and manuevering.... and you artificially eliminate the risk... the system is bound to collapse, as it has. Massive bubbles and busts are the future of our economic system if heavy regulation isn't implemented to make the PROCEDURES toxic, so that they aren't reinstituted again.
i should note, that i despise Geithner and Summers... and wish that Volcker had a larger voice in this administration.
